# Questions tagged [calculation]

A generic tag to understand the calculations in a specific case. Please give out a sample illustration and ask a specific question. Ideally should also be accompanied by specific subject tags like "credit-cards", "savings-account", "index-funds" etc.

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### IRS returns more money than my calculation - how can I find out where I was wrong?

A couple of months ago I filed the 2012 tax returns. I was expecting a few thousands USD for a refund. Finally, the payment was received in my bank account, and I noticed that the actual refund was ...
30k views

### What's the formula to calculate the monthly or lump-sum investment amount for a desired future value?

Give the following values: Inflation Rate 2% Expected Return Rate 5% Future Value 1,000,000 monetary units Years to Target - 10 What is the formula to calculate the amount of? Lumpsum investment ...
279 views

### Why is that we discount all the coupons and par amount of a bond at the same rate?

Why is that we discount all the coupons and par amount of a bond at the same rate, our YTM? If we think of each coupon/par as a strip/single bond on its own, wouldn't then each coupon payment be ...
333 views

### Need a formula to determine monthly payments received at time t if I'm reinvesting my returns

I need a formula for how much money I will be receiving monthly and how much I will have in total for any time t (in months). The following is my scenario: I will be investing \$900 monthly into a 3 ...
8k views

### How do I calculate the quarterly returns of a stock index?

I was reading an article and it stated something along the lines of (not accurate figures): Quarter | Stock Index % Change In Quarter Sep 2011 | 5.21 Dec 2011 | 4.69 Mar 2012 | 3.20 June 2012 | -...
14k views

### How to calculate Social Security benefits if retiring before the early Social Security age?

How can I calculate my Social Security if I retire before my early Social Security age? I tried to use the official website's calculator, but it required entering too much data, and the website ...
26k views

### How to calculate the closing price percentage change for a stock?

When viewing a stock on Yahoo Finance: http://uk.finance.yahoo.com/echarts?s=ASC.L#symbol=asc.l;range=1d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=...
148 views

### What is the formula for the Tesla Finance calculation?

According to http://www.teslamotors.com/true-cost-of-ownership with the fields set to a rate of 3.3%, down payment 10% over a 72 month term, it calculates this to be \$980/mo. How did they get there? ...
6k views

### What does Capital Surplus mean?

Given this information below, what does capital surplus mean? When does a capital surplus go up? What is the formula of capital surplus? I have read Wikipedia's definition, and it only seem to ...
908 views

### Annuities question - Equations of value

Chuck needs to purchase an item in 10 years. The item costs 200 today, but its price inflates at 4% per year. To finance the purchase, Chuck deposits 20 into an account at the beginning of each year ...
1k views

### If I lose 20%, what rate of return do I need to break even?

If the account is down 20%, what rate of return over the next year do we need to get to be even, in other words make back the 20% we lost? The rate of inflation in this case is zero.
236 views

### Method for calculating the wisest amount of liability to purchase for car & home insurance?

I've seen the advice to get enough liability insurance as you have in total assets, i.e. if your owned home, owned car & savings = \$100,000, then get \$100,000 liability coverage. What is the ...
21k views

### How do you calculate the P/E ratio by industry?

I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector: FINANCIALS DTV.O ...
277 views

### Calculating required rate of return for an income-generating savings account

Say someone has £1m. They want it to generate an increasing level of income, starting from £25k in year 1, and increasing at a rate 7% + inflation pa, such that the end value of the savings after 20 ...
12k views

### How to determine the final value of a U.S. Savings Bond at maturity?

Is it possible to determine the "final" value of a U.S. Savings Bond on its maturity date? The interest rate is fixed, the compounding periods are known (semi-annually for EE bonds), and the term is ...
3k views

### Negative properties of continuously compounded returns

I'm taking an intro to quant finance course online. I'm trying to better understand the properties and uses of continuously compounded returns. Specifically for this question, how can you have ...
1k views

### How do I calculate sales tax to many items? [duplicate]

I'm wondering how to calculate sales tax when this situation. Item price is 14.97 and quantity is 7. Sales tax is 9%. 14.97 * 7 * 0.09 = 9.4311 = 9.43 14.97 * 0.09 = 1.3473, rounding up: 1.35 * 7 = ...
2k views

### What is the optimal way to calculate tax: apply tax to each item, then sum the prices, or sum the prices, then apply tax? When are prices rounded?

What is the optimal way to calculate tax? Lets say tax is 7.5% or 0.075. \$2.32 X 1.075 = 2.494 --> Rounded: \$2.50 You can say that item is \$2.50 (tax included) and if you have two items: \$2.32 ...
12k views

### In the event of a corporate spin-off, how can I calculate the correct cost basis for each company's shares?

Consider this example: Siemens is going to have a spin-off (next Monday). If I owned, say, 10,000 shares of Siemens bought at an average price of 80 euros, my cost would be 800,000 euros. In the ...
6k views

### How to calculate dividend yield for the Dow Jones Industrial Average (DJIA) index?

This should be fairly straightforward. How do I calculate the dividend yield myself for the Dow 30 / Dow Jones Industrial Average (DJIA)? I'm thinking I just add the last dividend for all the ...
514 views

### What is the theory behind Rick Van Ness's risk calculation in the video about diversification?

In the video, Rick Van Ness states the following scenario: Stock A has a 7% return with +/- 1% risk Stock B has a 3.5% return with +/- 0.5% risk Stock A and B are perfectly negatively correlated. A ...
2k views

### How do I calculate the total return on a bond series given its yields?

How do I calculate the total return on a bond series given its yields? Is there an equation? I looked at this Investopedia article, but it only refers to stocks in general.
3k views

### Why does the calculation for percentage profit vary based on whether a position is short vs. long?

In this link here, the point: In a market in which upswings are likely to equal or exceed downswings, heavier position should be taken for the upswings for percentage reasons - a decline from ...
192 views

### How is the dividend payment calculated when an asset is disposed on the ex date? [duplicate]

Example: XYZ Corp pays a \$0.25/share dividend - Ex date=1/15/13, Pay date 1/31/2013 I own 100 total shares of XYZ on 1/1/2013 I buy 50 shares of XYZ on 1/15/2013 at 12 PM (increasing shares to 150) I ...
8k views

### Is there a term that better describes a compound annual growth rate (CAGR) when it is negative?

When calculating rates of return for an investment or portfolio over time, whether to report or compare performance, one frequently calculates the Compound Annual Growth Rate (CAGR). I've got a ...
14k views

### Value of Pension in regards to salary negotiations

I've been advised from careers.stackexchange to post this question here as it's more financial than career advice. I've received a job offer from a company and I'm looking to make a strong counter-...
475 views

### Comparing pre-tax versus post-tax health expenses?

I understand the concepts from this question and everything I have read says that the benefit of pre-tax expenses are that they reduce your taxable income. But to keep the math simple, let's say ...
4k views

### Calculating Profit Ratio (Gross Margin)

When looking at a company's income statement to calculate the Profit Ratio (Gross Margin) PM = Net Profit / Sales Do you include "other" revenue in the equation? Example: XYZ Ltd Income Statement ...
430 views

### How do I calculate the interest on my deposits to my landlord?

I was renting from this company called harbor house builders. I started renting from them in 2009 and at that time I was renting an apartment at 650 a month so I put 650 for rent and 650 for deposit. ...
2k views

### How to calculate average drawdown of a trading system?

Let's say that I'm trying to evaluate a FX trading system. I know how to calculate the largest drawdown during a period of time, but how can I calculate the average drawdown or the average largest ...
938 views

### How do I calculate the dividend yield for Disney Co?

I'm trying to "estimate" the dividend yield for Disney (NYSE:DIS). Let's pretend stock price will stay at \$57 and the tax rate is 1%. Is it really the case that after 3 years with this stock the ...
19k views

### How do you do inflation calculations and estimates?

I'm an engineer, not an accountant so I have no idea what formulas to use (or even the proper terms to google for). I've looked around on a couple of google results, but most of the explanations just ...
17k views

### “Out of Pocket Maximum” and health insurance plan terminology & calculation?

I'm trying to understand the terminology on my health plan. I've read numerous websites, which have only confused me more, as they fail to use examples (more than one should be required) for people ...
118 views

### Should total revenue or profit be proportional to money x investment time

I'm currently supervising a project with investors, and the following problem arrived: - How should I calculate the profits of each investor, i.e. should profit itself (after taxes and other ...
2k views

### What is the effective interest rate on a credit card that offers 0% interest with a 4% balance transfer fee?

I'm about to do a balance transfer that has a fee of 4%. It gives me 0% interest for 14 months. Is it just a straight calculation of 4% for the year or is there another calculation that I need to ...
2k views

### What's the equation for savings growth, that considers contributions?

I'm looking for the equation that basically works like this "Assuming you have X saved, and save Y more a year, and your savings grow at Z percent, you will have S after T years."
479 views

### Recurring deposit interest calculation compounding period rule in India

Is there any RBI guideline or rule or guideline available for Recurring Deposits interest calculation compounding period for Indian Banks. I find it different for different banks in India and the ...
185 views

### Put-Call parity - what is the difference between the two representations?

I have seen these two terms for put-call parity: S + P = C +Ke^(-rT) S + P = C + K/(1+r)^T Which one is the correct formula? When to use each of them? What is the diffrence?
6k views

### Calculating the profit earned from a leveraged futures contract

How do we calculate the profit/loss of Futures contract? For example, If I had a Futures contract that had \$10 000 as the underlying, it had \$1000 margin and the Futures contract itself was worth \$3. ...
1k views

### Dealing with fractions of a penny

If my car insurance was £1200.01 per year, I could end up being charged £100 + 1/12p per month. I know that's not how it works, the extra penny is kept whole and goes on a specific month instead. ...
581 views

### How do you go about calculating how much you need after retirement?

I am posting this question after reading this article on WSJ, where it says: Just 42% of working-age Americans have even tried to calculate what they will need in retirement, according to the ...
9k views

### Time-Weighted Rate of Return & Money-Weighted Rate of Return

Background I am trying to figure out the computational difference between Time-Weighted Rate of Return (TWRR) and Money-Weighted Rate of Return (MWRR). Let's say, I have a portfolio looking like ...
3k views

### Continuous compounding in practice

A common explanation for the mathematical constant e (2.71828...) is that it is the factor by which an investment would grow at 100% interest rate over a period if it is continuously compounded. In ...
324 views

### Find monthly interest rate from principal, monthly payment, and loan's term?

Is there a formula to find the monthly interest rate required on a compounded interest fixed-rate mortgage loan, given the principal, the monthly payment, and the loan's term?
839 views

### Rate of return of stock index

One can always see on the news for example, the movement of stock indexes. Say for example: S&P +5.15 (0.05%) or S&P -0.57 (0.001%) But how would I calculate the 2 numbers above? (+5.15 and ...
3k views

### What does the “SEC 30-Day Yield” mean for a Bond ETF?

I'm currently a student awaiting admission into grad school and have about \$10,000 in a Scott Trade account ready to invest. Because I'll be using the money to pay for moving expenses and anything ...
28k views

### What Excel function to use to calculate the return or interest rate on a savings account?

I'm getting confused by Excel's various different financial functions. Which one would I use to answer the following two questions and how? Suppose that on October 1st, 2012 I open a savings account ...
513 views

### Rules of thumb for present value of retirement funds given current age and income?

I know the general rule of thumb is you should save 15% of income to retirement, but I'm playing catch-up after years of neglect and contributing 25% until I catch up again. But how will I know when I'...